TO: Mayor and City Council
THROUGH: Steve Powers, City Manager
FROM: Ryan Zink, Franchise Administrator
SUBJECT:
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Intergovernmental Agreement for the performance of a Portland General Electric franchise fee review and analysis.
Ward(s): All Wards
Councilor(s): All Councilors
Neighborhood(s): All Neighborhoods
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ISSUE:
Shall the City Council authorize the City Manager to execute an Intergovernmental Agreement forming a government collective, Right of Way Accountability Coalition, to complete a multi-agency franchise fee review and analysis of Portland General Electric?
RECOMMENDATION:
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Authorize the City Manager to execute an Intergovernmental Agreement forming a government collective, Right of Way Accountability Coalition, to complete a multi-agency fee franchise review and analysis of Portland General Electric.
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SUMMARY AND BACKGROUND:
Franchise revenue from PGE is a significant source of revenue for the City of Salem (City). In FY 2015-16, PGE paid just over $5,622,000 in franchise fees to the City. Staff is not aware of any specific problems with PGE’s payment compensation. However, it is prudent to perform reviews periodically of this revenue source. A review would provide verification that the franchisee has properly maintained customer lists in response to City annexations and appropriately included all applicable revenue sources within the franchisee’s definition of “gross revenues.”
Industry standard recommends performance of at least one review during the term of the franchise agreement (15 years). The last franchise fee review was performed in 2001 and was done through a multi-agency coalition similar to the Right of Way Accountability Coalition (“ROWAC”). The 2001 review resulted in the City receiving an additional $465,769 in franchise fees from PGE.
FACTS AND FINDINGS:
The City has received notification that a coalition of cities is forming for the purpose of performing a joint review of Portland General Electric (PGE). This coalition will be known as the Right of Way Accountability Coalition (ROWAC).
The City of Milwaukie is the managing member of the ROWAC. The personal services agreement, scope of work, request for proposals, and cost estimates for the review are in the process of development. At this time, the estimated share of the cost of the review for the City is $20,000 and is anticipated to be budgeted and expended in FY 2017-18. It is useful for all cities interested in performing a joint review to enter into an intergovernmental agreement (IGA) (Attachment 1), which allows the City to experience savings by sharing the cost of the review with the other members of the ROWAC.
While the ROWAC may seek to perform reviews on multiple utility franchises, the first proposed review will be of PGE as it serves all of the participating cities and serves the vast majority of the citizens within each participating city. PGE is the largest provider of electricity in the City and serves approximately 80-90 percent of Salem residents and businesses.
Ryan Zink
Franchise Administrator
Attachments:
1. Intergovernmental Agreement to form ROWAC.